acatech IMPULSE
Executive Summary
Innovation Potential
of Biotechnology
acatech (Ed.)
Biotechnology – a key industry for the 21st century
experts who were surveyed, Germany currently is in a leading
international position in the area of biotechnology research.
Ever since the discovery of the genetic code in the 1960s, rapid
progress has been made in the understanding of biological processes. In particular, methods of genetic engineering are being
applied in increasingly diverse fields and new tools continuously
open up more approaches to analyse and modify life. Most recently, with the development of the CRISPR/Cas method in
2012, a decisive breakthrough was achieved. In combination
with modern types of analysis and data evaluation this method
has opened up brand new possibilities in the engineering of
biological processes. Many experts believe that this convergence of technologies for analysis, data processing and modification in the life sciences, and in biotechnology in particular,
unlocks a potential for transformation comparable to digitization. Biotechnology is a key technology for the 21st century. In
this acatech IMPULSE this substantial innovation potential in
a variety of different areas and sectors are illustrated.
Advances in genome sequencing on the basis of the Human
Genome Project and the development of new generations of
high-throughput processes have led to significant cost and performance improvements in the area of analysis. With them,
rates of improvement have been achieved that far exceed
Moore’s law in microelectronics. Due to cheaper and continuously improving technologies it is now feasible to capture the
entirety of the genes and even the proteins of an organism
(‘Omics technologies’). This allows for a better understanding
of the relationship between genotype and phenotype. The use
of these technologies results in the creation of very large
­volumes of data that subsequently need to be processed. For
this reason digital infrastructures are playing an ever bigger role
in the area of biotechnology, and crucial importance is being
attributed to bioinformatics.
Biotechnology is defined as the application of science and technology to living organisms with the goal of creating or modifying living or non-living materials and using them for different
purposes, for example, in healthcare, or for the production of
goods and services. This study is focused on healthcare and
medicine (red biotechnology), although industrial applications
(white biotechnology) and agriculture (green biotechnology)
are also addressed.
Diagnostics will benefit from novel and even individualized
procedures. Utilizing them will make it possible to diagnose
many diseases earlier and more effectively. Companion diagnostics, a new class of diagnostic test, are being developed which
allow physicians to forecast the effectiveness of a medicine on a
specific patient. Through this the effectiveness of treatments
can be increased, side effects can be reduced, and unsuitable
treatments can be avoided.
Trends and challenges in the engineering of
biological processes
In the area of the engineering of biological processes, new technologies allow for easier and more accurate modifications of
genetic material. Genes can now be precisely added and existing
genes can be targeted for deactivation, removal or the replacement by new genetic material. Terms such as ‘genome editing’ or
‘genome surgery’ highlight the precision and simplicity of these
processes, particularly the CRISPR/Cas method, which in ease of
use have been compared to word processing programs. Major progress is currently being made in the reduction of so-called off-­
target cuts in the genome. These unintended cuts in the genome
Life sciences and biotechnology are characterised by particularly long development and innovation cycles compared to other
disciplines. Frequently it takes several decades until fundamental research findings result in specific applications such as new
medicines or industrial processes. For this reason, stable framework conditions in research and the provision of continuous
­research funding are particularly important. According to the
continue to remain a challenge which has to be addressed before
genome editing can be used to safely treat patients.
Genome editing has the potential to be used as a form of gene
therapy so as to rectify congenital defects. The goal is to perform targeted ‘repairs’ of somatic cells so that they lose their
pathogenicity. While cell modifications outside the body such as
bone marrow modifications are relatively straightforward, an
­effective and safe application of genome editing on tissues
within the body still remain an unresolved challenge in need of
fundamental research.
Currently there is great hope for advances in cancer treatment.
Medicines on the basis of biotechnology already have led to significant improvements in oncology. Experts consider upcoming
immunotherapies to be the next major step to combat cancer. Some experts hope that this avenue of research might ultimately lead to a cure for cancer. To achieve this goal, mechanisms of the immune system are used to directly attack cancer
cells or to enable the immune system to effectively detect and
destroy cancer cells. Compared to classic chemotherapy or radio­
therapy, healthy tissues are less affected. Novel cancer treatments therefore have the potential not only to be more effective, but gentler in their effects on patients as well.
Experts already consider the combination of genome editing
and induced pluripotent stem cells (iPS) to offer considerable
potential for research into complex diseases and for finding
possible cures for them in the future. In addition, it is hoped
that further progress will be made in the area of bio-implants
and xenotransplantation. For example, pigs could be genetically modified to reduce rejection reactions in human recipients of
their organs.
A further area of research and application is the targeted modification of micro-organisms to cause them to either produce certain substances (for example, insulin, enzymes, biofuels) or extract them (for example, metals from ores or waste water). To
achieve this goal of customizing organisms, approaches from engineering and IT are currently starting to be applied to biology
(‘synthetic biology’). Ultimately this could lead to the creation
of micro-organisms which function as platform organisms,
meaning they would only be equipped with genes indispensable
to survival. As part of a modular system they then could be rapidly and flexibly equipped with specific genetic modules so as to
produce the desired special chemicals, active agents or fuels.
One particular challenge in the cultivation of micro-organisms
and other cells is the development of customized bioreactors.
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Depending on the area of use they can process a single drop of
liquid or up to tens of thousands of litres. The automation and
industrial scaling up of biotechnology processes are of decisive importance for a scientific breakthrough to become an innovation in the field of medicine, manufacturing or farming.
According to many experts, Germany still has traditional,
though endangered, strengths in process engineering which
could be put to good use in this area.
The experts surveyed for this study generally attested to the scientific expertise in Germany, as well as its potential as an international leader in the engineering of biological processes.
Their assessment of how well these opportunities can actually
be put to commercial use in the light of the current framework
conditions is more varied.
Economic importance and market potential
The aforementioned trends in science and research are associated with considerable potential for the creation of economic value and highly skilled jobs. The experts agree that almost all
sectors are making increased use of bio-based processes and
products, and that their value-added chains are being supplemented with biotechnological components. This is taken into
account by the concept of the bio-economy, which covers all economic sectors that produce, process, use and trade in renewable
resources and their products. These often indirect effects on different industries must be taken into account when forecasting
the market potential of biotechnology. These potentials can be
differentiated according to the following three dominant fields:
§§ Agricultural (‘green’) biotechnology is a global growth market. The cultivation of genetically modified plants – mainly
soya, maize, cotton and rapeseed – is particularly widespread
in North America and emerging nations. They now account
for 13 % of the arable land available worldwide. The market
value of genetically modified seeds is predicted to increase
to USD 28 billion by 2019 (2014: USD 16 billion). This technology finds practically no use in Germany. Nonetheless, the
fundamental research in this field performed in Germany
continues to be highly regarded.
§§ A significantly greater value-added potential for Germany
is seen in industrial (‘white’) biotechnology, where existing strengths in the chemical and pharmaceutical industries can be leveraged. Approximately 20 to 30 percent of
chemical products and processes can be replaced with the
use of biotechnology. This could allow for a total revenue
of more than USD 500 billion worldwide by 2020. Key
segments of industrial biotechnology are the enzyme
Core findings
1. Digitization is set to be followed by the next revolution
6. A public political commitment to Germany as an inno-
in the world of business and society: the widespread use
of biotechnology in medicine, agriculture and industry.
As a key technology of the 21st century, biotechnology offers considerable innovation potential to a variety
of different sectors.
vation-friendly business location which uses the opportunities of biotechnology and supports its further development with a clear mission is essential.
2. Germany is superbly positioned in life sciences and
b­ iotechnology research, but also has untapped potential in the area of transfer.
3. Due to long research and development cycles and huge
capital requirements, biotechnology involves a high
­level of investment risk (high risk, high return). This
­requires a considerable degree of perseverance of all
­involved participants.
4. In the area of medicine, the German biotechnology sector is currently limited largely to the roles of supplier or
service provider. A focus on the development of medical drugs themselves has so far been prevented by unfavourable regulatory framework conditions.
5. Germany now stands at a crossroads: to prevent the
loss of relevant biotechnology expertise in the area of
design, development and production, continuous support not only to research but also to the development
of a competitive biotechnology industry must be given. The latter can be achieved by creating appropriate
framework conditions.
market and biofuels. The latter could achieve a significant
growth spurt through processes that make use of waste
and residual materials (‘second generation biofuels’).
These could generate up to USD 185 billion in revenue on
a global basis by 2021.
§§ The experts assign a particularly high degree of social value
as well as high value-added potential to the area of medical
(‘red’) biotechnology. In 2015, 23 percent of the revenue in
the global pharmaceutical industry was achieved with
7. To enable a biotechnology-based industry to develop in
Germany, the framework conditions for the publicly
­financed validation of research results and the availability of private venture capital and growth capital
need to be significantly improved. The government has
the necessary financial means and tax-related instruments to be able to achieve this and it should use them.
8. To tap the potential of biotechnology in the area of
healthcare, the benefits and costs of new treatments
need to be assessed across the entire duration of the disease and/or the lifetime of the patients. This requires a
reliable pool of medical data, which does not exist so far.
9. Vocational training courses and study programs need
to be adapted to the new areas of research and business opened up by biotechnology. In particular engineering and technical sciences are of increasing importance for biotechnology. To leverage Germany’s
traditional strengths in these disciplines, they need to
be closely linked to life sciences and IT.
10.The acceptance of innovations in biotechnology requires their benefit to be evident to society. In this respect, it is necessary for the political and public debates
to keep pace with the technological development in order to be able to assess risks and opportunities on a
well-informed basis.
bio-pharmaceuticals. By 2020, an increase to 27 percent is
expected, which is equivalent to a worldwide sales volume
of almost USD 280 billion. Among the various therapeutic
areas, oncology is seen to possess the largest growth potential. Biosimilars represent another very promising area.
Along the same lines as generics in conventional drugs, they
can represent a cost-effective alternative to the prescription
of expensive original products when the patent protection
of the latter expires.
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The biotechnology sector in Germany
Ethical, legal and social implications
Comprising around 600 companies, the sector of the so-called
dedicated biotech companies in Germany is still quite small
(mainly SMEs, total revenue in 2015: EUR 3.4 billion, but investments of more than EUR 1 billion in R&D). These values rise
sharply if companies in the pharmaceutical and chemical sectors are also included. In most cases it is not possible to put
numbers to the share of biotechnology in the overall R&D-­
spending of these companies.
Applications in the areas of medical and agricultural biotechnology do not only depend on the creation of favourable regulatory framework conditions. Their use is highly dependent
on their societal acceptance as well. An increase in acceptance is dependent on satisfactory answers to controversial
ethical, legal and social issues which arise with new methods
and applications.
While the development of active medical substances is regarded
as the pinnacle of achievement in red biotechnology, German
biotech companies are more likely to operate as contract manu­
facturers, suppliers or other service providers than their international competitors. Their business models involve fewer risks,
but they also offer far fewer opportunities at the same time.
Service business of this kind is often pursued because of the particularly low accessibility of venture capital and other sources
of finance for ‘high risk, high return’ research in Germany. The
lack of a continuous financing chain from the seed phase to
an IPO or to other exit options is seen as the key obstacle to the
development of a bio-based industry in Germany. The main reason for those inadequate financing conditions is seen in tax-­
specific peculiarities in Germany (discrimination against equity capital when compared with external borrowing).
Further hurdles to the development and growth of biotechnology companies are identified as an insufficient entrepreneurial
spirit and a low international visibility of German companies and
centres of biotech activity. In addition, Germany suffers from a
validation gap. This lack of funding often prevents drug candidates from academic research from being further developed up
to the ‘proof of concept’ stage, which is attractive to private investors. Finally the experts fear that the low acceptance of ge­
netic engineering in the agricultural sector among the German
public might negatively affect other fields of biotechnology as
well. They perceive the dangers of a loss and/or departure of
­expertise and a decline in biotechnology investments.
Due to these weaknesses, biotech companies in Germany either
fail to secure access to capital in order to fuel their growth now
and/or in the future, or are likely to be bought out by foreign
players. For both reasons Germany has already lost significant
value added potential. In summary, many experts believe Germany is now at a crossroads: if the capabilities to design, develop and produce biotechnology in Germany are to be maintained
or developed further, a considerable mobilisation of additional (venture) capital is necessary.
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The availability of skilled workers, both now and in the future,
is another important factor. The experts attest to the high quality of current vocational and academic training in fields relevant
to biotechnology in Germany. It will be necessary however to
further integrate IT and data processing competences into
the training of biologists and chemists to maintain this level.
In the same vein biotechnology topics and skills need to be further embedded into study programs and vocational training
in technological fields and their visibility increased. In the area
of engineering sciences, it is also necessary to prevent a looming loss of expertise in the field of process engineering.
The handling of personal data has proven to be particularly
sensitive in the healthcare sector. At the same time, research
into and the application of individualized medicine is highly
dependent on the collection and combination of health-related
data. Therefore data has to be protected in the best possible
way so that patients are able to maintain control of their data
and can agree to its transfer and use on a well-informed basis.
At the present time forging such links between the scattered
sets is impossible in the German healthcare system due technical reasons and conflicts of interest. Data aggregation of this
kind, however, would allow for the evaluation of the cost-­
benefit ratio of a particular therapy over the entire life cycle
of a patient. On this basis, it could be assessed as to whether
the use of a costly one-time but nonetheless effective new
medi­cine would not only be of considerable personal benefit
for the patient, but also be more cost-effective than the longterm treatment with conventional drugs. On this basis new
models of payment or reimbursement, such as ‘Pay by Performance’ could be developed and utilized.
Scientific and technological breakthroughs often lead to previous political decisions and legal categories being ‘superseded’
and becoming unable to fulfil their original purpose. A development of this kind is also evident in the field of genome editing.
While there is a broad consensus in Germany that human
germline intervention should not take place for ethical reasons,
the experts perceive a need for conceptual clarifications by
Strenghts
Weaknesses
§§ Excellent research capabilities in all areas relevant to
§§ Underdeveloped culture of knowledge transfer
biotechnology (biology, medicine, bioengineering)
§§ Good balance of fundamental research and applied
research
§§ Mix of dynamic SMEs (‘Drivers of Innovation’) and
global players in the chemical and pharmaceutical industries (Bayer, BASF, Boehringer Ingelheim, Merck,
Henkel et al.)
§§ Highly skilled academic and non-academic workforce
§§ Competences in knowledge-based industries
§§ German engineering
§§
§§
§§
§§
(­focus on the production of knowledge, deficits in
the subsequent validation and commercialization
of ideas)
Lack of venture capital
No integrated ‘funding chain’ (public grants,
seed-funding, venture rounds, exits, IPOs)
German companies focus on service and supplier
roles, no emphasis on the development of active
pharmaceutical ingredients (with high potential ROI).
High public funding of academic research, but lack
of adequate leverage of investments in the commercial sector (fiscal policy, regulation)
Opportunities
Threats
§§ Biotechnology as a cross-sectional technology with
§§ Corporate loss of competences and connectivity
wide application potentials in many industrial sectors
Participation in the global transformation of the
chemical and pharmaceutical sectors (steady increase in biopharmaceuticals and biosimilars; soft
chemistry etc.)
Biotechnology as a knowledge-based industry with
high expertise requirements (comparative advantage), creation of high quality jobs
Emerging biotechnology enables sustainable eco­
nomies; establishment of new industries with high
value creation potential
Development of smart production technologies to
introduce principles of ‘Industrie 4.0’ to biotech­
nological production and manufacturing
Mission-oriented public funding (biotechnology as
‘next moonshot’)
n­ ecessary for cooperation with academic research
due to cuts in in-house R&D
Problematic relations of exchange and cooperation
between big corporations and a biotechnological
sector consisting mostly of SMEs
Lacking commercialization due to low public acceptance of biotechnology (e.g. green genetic engineering, genome-editing)
Loss of competences in bioengineering
Decline or departure of medical biotechnology expertise due to lack of funding and growth potential,
resulting in loss of competences in the design, development and production in the medium term
§§
§§
§§
§§
§§
§§
§§
§§
§§
SWOT-Analysis of biotechnology in Germany (source: authors' own diagram)
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ethical experts and legal scholars in several areas. Chief among
those are the meaning of the term ‘embryo’ in terms of the German legislation on embryo protection and stem cell research as
well as the definition of genetically modified organisms. There
now are cases where genome-edited plants cannot be distinguished from conventionally bred plants. Currently, in legal
terms, the intentional increase in mutation rates through the use
of radioactive irradiation or mutagenic chemicals is considered
to be conventional plant breeding. If the more precise method of
genome editing would be classified as ‘genetic engineering’, it
would be subject to considerably stricter approval and control
mechanisms, although it is associated with fewer risks than the
application of previous methods. For this reason, most experts
argue that the definition of GMOs should focus more on the
product and less on the process of modification.
Despite this most experts express their belief that genetically
modified animals and plants should not to be introduced by
exploiting legal loopholes. This would only serve to increase
public resistance against genome editing. They stress the necessity of a public debate instead. Likewise treating the currently
arising ethical and legal issues as ‘taboo’ is seen to only lead to
even greater problems in the long run.
According to the experts, however, there is no formula for success on how to conduct this urgent debate at the public level.
They agree that a concerted effort by stakeholders from science, industry and politics is necessary. Risks are not to be
­ignored, but above all else, the specific benefits of the new
technologies are to be made evident to both users and the
­wider general public.
Methodology
The acatech IMPULSE Innovation Potential of Biotechnology is based on the evaluation of the latest specialist literature as
well as expert interviews with 76 representatives from science and business. The interviews were conducted between May
and October 2016. The goal was to gain an overview of current developments in life sciences and biotechnology. On the
one hand, the experts were questioned about the leading trends in life sciences and biotechnology, while on the other
hand, the attractiveness of the business location of Germany, as well as the political and public framework conditions were
subject to evaluation. Building on this, the participants were consulted about possible measures to make the best use of
the innovative potential of biotechnology in Germany.
Editor: acatech – National Academy of Science and Engineering
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This summary is based on: acatech (Ed.): Innovation Potential of Biotechnology (acatech IMPULSE), Munich: Herbert Utz Verlag 2016. The original version
of the publication is available at www.acatech.de/publikationen or www.utzverlag.de.